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Income Taxes | 9 Months Ended
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Oct. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our tax provision for or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate as prescribed under Accounting Standards Codification (“ASC”) 740, “Income Taxes”, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment, which results in a provision for or benefit from income taxes in the current quarter. We recorded an income tax provision of $11.8 million and $27.0 million for the three and nine months ended October 31, 2025. We recorded an income tax provision of $9.2 million and an income tax benefit of $804.3 million for the three and nine months ended October 31, 2024. In the three and nine months ended October 31, 2025, the tax provision was driven by U.S. and foreign earnings, partially offset by benefits related to stock-based compensation. In the three months ended October 31, 2024, the tax provision was driven by U.S. and foreign earnings. In the nine months ended October 31, 2024, the tax benefit was primarily due to a discrete tax benefit of $837.7 million recognized in the three months ended July 31, 2024 for the release of the valuation allowance related to our U.S deferred tax assets, offset by tax on U.S. and foreign earnings and stock-based compensation. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The legislation includes significant tax law changes, including the restoration of immediate expensing for domestic research and development costs. The legislation has multiple effective dates with certain provisions effective in 2025 and others implemented through 2027. While we continue to evaluate the impact of the legislation taking effect in future years, the impact of changes effective during fiscal 2026 are included in our tax provision and have resulted in additional tax expense. We regularly assess the need for a valuation allowance on our deferred tax assets. In making this assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all the deferred tax assets will not be realized. As of July 31, 2024, based on all available positive and negative evidence, having demonstrated sustained U.S. profitability which is objective and verifiable, and taking into account anticipated future earnings, we concluded it is more likely than not that our U.S. federal and states deferred tax assets will be realizable, with the exception of certain federal deferred tax assets subject to limitation on use and our California deferred tax assets. The nine months ended October 31, 2024 included a $837.7 million release of a net valuation allowance, recorded as a discrete tax benefit during the three months ended July 31, 2024. As of October 31, 2025, we continue to maintain valuation allowances related to certain federal deferred tax assets subject to limitation on use and our California and Ireland deferred tax assets. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis. As of October 31, 2025, our gross unrecognized tax benefits totaled $86.2 million, excluding related accrued interest and penalties, of which $69.1 million would impact the effective tax rate if recognized. Our policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision. We do not expect material changes to our gross unrecognized tax benefits within the next 12 months.

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